Takeaways
- Buyer's agents help negotiate and advocate for the best deal when you buy a home.
- Buyer's agents are licensed professionals who know the local real estate market.
- Buyer's agents offer current and tailored advice, specializing in representing purchasers.
- Buyer's agents guide you from identifying housing “must haves” to closing documents.
- Home sellers pay a commission that is split between the listing and buyer’s agent.
Buying your first home can be quite a maze to navigate. Buyer’s agents hold your hand throughout the home-buying process, giving you critical advice to help you buy the perfect home.
Buyer’s agents represent you through the entire span of the home buying process and assist in sourcing, showing, and negotiating critical aspects of the home purchase transaction. As your liaison between the listing agent and sellers, a great buyer’s agent will advocate for all your interests. Here’s what you need to know about working with a buyer’s agent.
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What is a Buyer’s Agent?
Buyer’s agents are licensed professionals who work in the real estate industry. They represent your interests across the spectrum of the home-buying journey. Think of the buyer’s agent as your guide and advocate. Not all real estate agents are buyer’s agents. A listing agent does the exact opposite of a buyer’s agent and helps the sellers try to get the best deal possible. Here are how buyer’s agents differ from a typical real estate agent:
- Buyer’s agents work for you, not the seller. Buyer’s agents have a fiduciary duty to prioritize your needs above other parties (e.g., sellers, listing agents, mortgage lenders). They are legally and ethically bound to act in your best interest, and their specific fiduciary duties include having loyalty, maintaining confidentiality, following and presenting required disclosures, and taking reasonable care and diligence [1].
- Buyer’s agents specialize in representing purchasers. Buyer’s agents understand the challenges buyers face. They offer tailored advice to help you manage the current property market. These insights can give you a leg up in the buying process. For example, in a seller’s market, they might advise you to offer higher than asking prices to secure a home that checks all your boxes. Alternatively, a buyer’s agent might help you negotiate a discount to the current asking price in a buyer’s market.
- Buyer’s agents may have insider knowledge. The term inside baseball applies to buyer’s agents. Some agents have strong networks, access to exclusive listings before they even hit the broader market, and vital relationships with listing agents can help them negotiate terms on your behalf.
In short, a buyer’s agent ensures you are informed, protected, and advocated for throughout the often-complex home-buying journey. If you are looking to purchase a home soon, considering hiring a buyer’s agent could be a smart money move. A buyer’s agent is an indispensable component in the home-buying journey.
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What Does a Buyer’s Agent Do?
A buyer’s agent wears many hats, working diligently behind the scenes to make your homeownership dreams a reality. Discussing what you want from a real estate transaction will help the buyer’s agent prioritize how they work deals. Here are some key responsibilities of a buyer’s agent:
- Understand Your Needs: They will discuss your ideal price range, preferred neighborhoods, must-have features, and deal-breakers. This creates a clear picture of your perfect home and gives them a palate to work from.
- Identify Suitable Properties: Buyer’s agents actively source and search for homes that meet your criteria, both listings on the public market and those off-market deals they hear through their networks.
- Accompany You on Showings: An agent provides insight during home tours, pointing out potential advantages of properties, red flags to houses, and highlighting where a home does and does not meet your criteria.
- Advise on Pricing and Offer Strategies: Real estate agents have a firm pulse on recent transactions. Understanding the market gives them a list of comparable sales data to analyze and a sense of how the market operates to help them determine fair and competitive offers.
- Negotiate Skillfully on Your Behalf: Agents protect your interests during negotiations, aiming for the best possible price and terms. They leverage how many other offers a house has had, recent sales data, and your financial limitations when negotiating the best purchase price for you.
- Guide You Through Closing: Buyer’s agents coordinate with mortgage lenders, home inspectors, and other parties to manage deadlines and ensure the closing process goes smoothly.
Bottom line, a buyer’s agent is your partner from your initial wish list to the day you get the keys to your new home. If you are even a tad bit apprehensive about buying a home yourself, a buyer’s agent can be your greatest ally.
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Do You Pay the Buyer’s Fee?
In most cases, the answer is no; you do not directly pay the buyer’s agent fee. Here is how it typically works:
- Seller Typically Pays: When someone sells a home, the seller is charged a commission on the sale.
- Commission Is Built into the Price: Sellers usually factor the real estate commission for both the seller’s agent and the buyer’s agent into the listing price of their home.
- Fee Is Split: The seller’s agent splits the commission with your buyer’s agent.
So, while you usually do not make a separate payment, it is essential to understand that the commission fees ultimately affect the purchase price. However, a buyer’s agent who protects your interests and negotiates effectively can be well worth the indirect cost.
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5 Steps to Hire a Buyer’s Agent
It is an understatement to say that buying a home is a major investment. Most Americans have their net worth tied up in the value of their home. However, a skilled buyer’s agent can save you money, time, and stress throughout the purchasing process. Follow these steps to find an agent who will champion your homeownership goals.
1. Get Referrals
A strong referral can be your roadmap from the start of your search. Begin by asking friends, family, or colleagues who have recently bought homes if they would recommend their buyer’s agent. Positive word-of-mouth from someone you trust is invaluable and usually leads to the best buyer’s agents.
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Do not hesitate to inquire with your lender or mortgage broker because they maintain professional relationships with many real estate agents and can suggest real estate agents. Finally, your local or state real estate association can provide excellent resources, such as directories and member search functions, to help you find agents in your area.
2. Search Online and Review Experience
Once you have a few potential agents, it is time to turn your research online. Carefully examine their profiles and websites to get a feel for their expertise. Pay close attention to the following factors:
- Specialization: Is the buyer’s agent on your desired neighborhoods or the specific type of home you are seeking? Look for agents who specialize in your target market or neighborhood because they often have deep knowledge and valuable connections.
- Transaction Experience: Dive into a buyer’s agent’s credentials, sales history, and online reviews. Testimonials can provide valuable insights into the agent’s communication skills, work ethic, and negotiation abilities. Do not be afraid to look for patterns in the feedback that indicate an agent’s strengths or potential weaknesses. Great real estate agents can be hard to find, so if you find one jump on the opportunity.
- Licensing: It is vital to verify an agent’s active license status with your state’s real estate licensing board. This helps ensure that the agent is a qualified real estate professional who adheres to the ethical standards of the industry.
Remember, thorough research helps you find a buyer’s agent who not only has the necessary skills but also aligns with your personality and communication style. Investing time here can ease the stress of the home-buying process.
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3. Meet with Multiple Buyer’s Agents
It is tempting to select the first agent who seems like a good fit, but you should probably interview at least three to five real estate agents. This will give you the sample size to make an informed comparison. You should schedule formal interviews and take them seriously. After all, this person can start working for you. Along with the questions mentioned earlier, also consider asking:
- Do you have any additional credentials or specializations relevant to my home search?
- How well do you understand the current market conditions in my target area?
- Can you walk me through a recent experience where you faced a major challenge in helping a buyer, and how you overcame it?
By evaluating agents based on their answers, you will get a much clearer picture of who is best equipped to help you achieve your home-buying goals. Take notes so that you can compare the real estate agents you interview at the end of the process. Then you can narrow down your selection.
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4. Check References
Reference checks can seem a bit formal, but they are certainly a necessary part of the equation. Think of reference checks simply as past clients vouching for your potential agent. Do not simply ask for contact information; be prepared with focused questions like:
- Were you satisfied with the agent’s knowledge of the local market and ability to find suitable listings?
- How responsive was the agent to your concerns and inquiries?
- Did you feel supported during the offer and negotiation phases?
- Describe the agent’s strongest assets as your representative.
Honest feedback from recent clients paints a clear picture of how the agent performs on the job. You might glean some insights you were not aware of before.
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5. Hire Buyers Agent
After all your homework is done, it is time to hire your buyer’s agent. To make it official, here is what comes next:
- Buyer Representation Agreement: Before an agent can fully advocate for you, they need a signed agreement. Take the time to read and understand this contract. It usually defines the agreed-upon commission, the type of homes being sought, and the duration of the agreement.
- Open Communication: Proactive communication is essential for a successful relationship with your agent. Discuss how often you expect updates, whether you prefer a simple text or a detailed phone call, and how frequently you plan to communicate about listings.
By signing the agreement, your buyer’s agent becomes a valued ally in your quest to find your ideal home. This step marks the beginning of an exciting new chapter in your homeownership journey.
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Top 10 Questions to Ask a Buyer’s Agent
Most first-time home buyers don’t know where to start with interview questions for their buyer’s agent. Since you haven’t been through this process before, here are some questions to consider asking a prospective buyer’s agent:
1. How long have you worked as a real estate agent?
An agent’s experience level brings different strengths. A seasoned agent may have deeper market knowledge and established connections, while a newer agent might bring fresh enthusiasm and a strong work ethic.
2. What inspired you to pursue a career in real estate?
This question helps you understand their motivations. Agents passionate about helping others achieve homeownership often prioritize client satisfaction and build strong relationships.
3. Do you work as a real estate agent full-time?
While many great agents start working part-time, buyers often need flexibility and availability outside typical business hours. Understanding an agent’s schedule helps ensure your needs will be met.
4. Do you typically represent buyers, sellers, or both?
It is ideal to find an agent experienced in both areas. Representing both buyers and sellers provides insight into different mindsets and negotiation tactics.
5. What aspects of your work as a buyer’s agent bring you the most satisfaction?
Their answer reveals their driving force. Is it genuinely helping clients, the thrill of negotiations, or primarily the financial reward? This helps gauge their overall priorities.
6. In which neighborhoods or areas do you primarily focus?
Seek an agent with extensive knowledge of your targeted location(s). They will understand neighborhood nuances, market trends, and property values in those areas.
7. What sets you apart from other buyer’s agents?
Look for compelling answers regarding specific benefits the agent brings to the table. Do they emphasize skilled negotiation, access to insider listings, or exceptional market knowledge?
8. How do you prefer to communicate with your clients?
The best agent mirrors your communication style — emails, texts, or phone calls — ensuring your preferences are respected.
9. What are your typical working hours, including evenings and weekends?
Do you work evenings and weekends? It is important to choose an agent who accommodates your schedule, especially in competitive markets with limited property viewing times.
10. Are there any additional fees for buyer representation with your agency?
Some agencies now impose extra fees on buyers on top of standard commissions. Ask upfront for full transparency in payment expectations.
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Smart Summary
Buying a home is a fun and exciting process. Having an advocate on your team to help you win this transaction will make the process that much better. A buyer’s agent can be that advocate, providing invaluable insights and advice to help you secure your perfect home. Research and conduct due diligence on your real estate agent to ensure you will get along during the highs and lows of the process. Getting a real estate professional on your side is a smart money move.
(1) National Association of Realtors. Fiduciary Duties. Last Accessed February 23, 2024.
